Local taxation: real property transfers.

Plain English Breakdown

The official source does not specify if the analysis needs to cover market-rate housing projects exclusively or broadly.

Real Property Transfer Taxes

This law requires city councils to publish an analysis online before imposing taxes on the sale of real property, focusing on how these taxes affect affordable housing.

What This Bill Does

• Requires city councils to create and post a detailed report about proposed transfer taxes on real property sales.
• The report must examine the impact of the tax on the production of affordable housing.

Who It Names or Affects

• City councils that want to impose transfer taxes on real property sales
• People and companies buying or selling real estate

Terms To Know

transfer tax

A tax charged when a piece of land or building is sold from one person to another.

affordable housing

Homes that cost less than what many people can afford, often helped by government programs.

Limits and Unknowns

• The bill does not specify the extent of the analysis or who will ensure compliance with this requirement.
• It is unclear how this law might affect existing real property transfer taxes already in place.

Official Summary Text

AB 698, as amended, Wicks.
Local taxation: real property transfers.
Existing statutory law, enacted by Proposition 62, as approved by the voters at the November 4, 1986, statewide general election, prohibits a local government or district from imposing any transaction tax or sales tax on the sale of real property within the city, county, or district, except as provided. The California Constitution authorizes cities organized under a charter to make and enforce all ordinances and regulations in respect to municipal affairs, which supersede inconsistent general laws. Existing law, the Documentary Transfer Tax Act, authorizes the imposition of a tax by a county or city, as provided, with respect to specified instruments that transfer specified interests in real property.
This bill would require a legislative body of a city, as specified, before it adopts any transfer tax on the sale of real property, to develop
and post on its internet website an analysis that examines, at a minimum, the effect of the proposed transfer tax on, among other things, the production of affordable housing, including affordable housing produced by market-rate housing projects.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

Current Bill Text

Download Bill PDF